China Finally Gives Green Light to Dentsu-Aegis Deal

By Hiroyuki Kachi and Isabella Steger

Reuters

Japanese advertising firm Dentsu Inc.’s acquisition of the U.K.’s Aegis Group PLC has finally won Chinese regulatory approval after the deal was first announced in July.

Dentsu said Tuesday that the $5 billion deal will go ahead, with China the last antitrust authority to OK the deal, which was slated for completion between October and December. China’s antimonopoly law allows it to rule on mergers globally that would have an impact on the country.

The stalled deal comes as political tensions stemming from territorial disputes have heightened in the past year between China and Japan.

This isn’t the only example of Chinese regulators flexing their muscle against Japanese companies. Home builder Daiwa House Industry Co. said in December that it was forced to push back its planned Y50 billion ($531 million) acquisition of construction firm Fujita Corp. four months after the deal was announced. The deal, which was slated for completion on Dec. 20, received Chinese regulatory approval in mid-January.

Separately, the planned merger in Taiwan between MediaTek Inc. and MStar Semiconductor Inc., two chip-design companies, is also being pushed back to Aug. 1. from May 1 as it awaits Chinese regulatory approval. It has already been delayed from an initial deadline of Jan. 1. The deal, which would give the two firms a combined 80% share worldwide of the TV chip market, received South Korean regulatory approval last week.

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